Fort business park getting nibbles
Although Fort Atkinson was not a viable location for the Taiwan-based Foxconn plant, the broker for the city’s southside business park says there has been activity during the past year and things are looking up.
At its meeting Tuesday, the Fort Atkinson City Council unanimously approved a one-year extension for the exclusive listing agreement signed with CBRE Inc. of Milwaukee to market the Robert L. Klement Business Park.
Located along State Highway 26, the business park was developed when, during a three-year span toward the end of the 1990s, virtually no land was available for incoming industry and existing industries seeking to expand while remaining within the community. Wood Design Inc. was the first business to relocate to the business park in May 2001. Since that time, Integrated Process Engineers & Constructors Inc. (IPEC), RateWatch, Central Coast Restaurant and the Dance Club, and Rock River Dental built in the business park.
In recent years, RateWatch has moved downtown to the so-called Creamery Building and the Central Coast Restaurant and the Dance Club have closed and changed ownership, leaving the building with an uncertain future.
From 2009-16, the city had an exclusive listing agreement with NAI MLG Commercial to market and sell the land in the business park. However, there were no lot sales and development had been minimal beyond an expansion of IPEC since 2008.
Thus, the council inked the agreement with CBRE?last year.
“Looking over the past year’s activity and being generally satisfied with it, we wanted to extend that another year and see where that takes us,” City Manager Matt Trebatoski said of CBRE pact.
Christian Chambers of CBRE said that in the past year, seven prospects have shown interest in the property.
He described two of them as being still-warm prospects, one even being on the “hotter” side.
“Other than that, land is popular again,” Chambers said. “There is just no supply so people don’t have a choice but to put the shovel in the ground.”
The broker explained to the council that a “warm” prospect is someone that is genuinely looking to build and is still keeping in touch with him.
“If they are not looking to build, they are looking at existing (facilities), but there is no existing out there,” Chambers said. “In this case, there is going to be movement, there is going to be a play and I’m in the game to make sure you are on the fair share.”
Conversely, a “cold” prospect, which he labeled the remaining five, are ones that he can do nothing more to bring the lead any further.
Council member Davin Lescohier praised the marketing report on the property.
“It is good to see that there has at least been some nibbles out there in the past year,” he said.
Chambers noted that Fort Atkinson just had hit a bad spot within a few years after the park was developed.
“Land went away and no one was doing anything,” he said. “We have seen a real uptick in land now. This is as busy as we’re ever going to be.”
Council member Paul Kotz noted that one of the prospects called for a substantial amount of square footage, in the range of 20 million square feet.
That’s when Chambers indicated that, in fact, during its search through southern Wisconsin, Fort Atkinson was a small blip on Foxconn’s radar.
“Certain things come through my office in Milwaukee and maybe two a year don’t get shared with the rest of the office and this was one,” Chambers said.
The usually large request was for Foxconn. The company subsequently advanced plans to build a massive display panel factory in the Kenosha area, for which the state Assembly was poised to approve a $3 billion tax break today.
“Obviously, there is nothing here we have to offer,” Chambers said. “That being said, the labor market in southeastern Wisconsin is all but dead.”
Companies have zero choice but to start moving this way.
“Generally, your real estate is 5 percent of your business cost and your labor is 20 percent,” he said. “What is really most important? At this point, you guys are going to systematically feed off of Janesville as Janesville fills out.”
However, Chambers pointed out that Janesville has nothing.
“I got a request for 25,000 square feet and I told the guy ’I’m going to take a look, but right now, the 500,000 square feet that just got bought is all that’s out there,” he said. “The way I see you fit into that picture as far as Foxconn goes — because I do believe the ripple effect is pretty far and wide-reaching — is that is going to be an eaten-up piece of property over there. We’re not just talking about Foxconn; we’re taking about the suppliers.”
Chambers suggested that it would be a tight labor market in southeastern Wisconsin.
“Somebody over here is going to get paid $11 per hour for what someone over there would get paid $18 per hour,” he said. “Fort Atkinson will fit well between the two regions.”
Council member Jude Hartwick questioned Chambers about how he responds to those who were looking for existing buildings within the Fort Atkinson area. Specifically, he referred to the Kmart Plaza.
In January 2014, the Kmart store, located in the High Street Kmart Plaza, closed its doors as part of several Kmart closings that took place across the country. Following the Kmart closure, the Radio Shack store shut its doors in 2015. The Piggly Wiggly Supermarket to the north has been vacant for years.
With those two recent closures, the Riverfront Family Restaurant stands as the lone remaining tenant in the more than 90,000 square-foot complex that sits on 9.49 acres. The Kmart site has been listed as $1.2 million by Sears Holding Corp. since the site has been vacant.
“I tell them exactly what is in Fort Atkinson,” Chambers said. “If we’re talking about existing, I already know what’s existing and I’m going to especially talk about Kmart.”
He said he probably pushes it more than the person listing it.
“I’ve talked about Kmart to many individuals because the fact of the matter is, at $10 per square foot, you can’t build anything for under $70 per square foot depending on the type of building you’re putting up,” Chambers said.
Returning to discussion of the Klement Business Park, council member Beth Gehred sought for Chambers to take advantage of the natural area surrounding the site.
“I just feel like when you’re showing people if they are looking for the amenities of the area, if you find someone that would find it excellent to build a facility that would take advantage of the fact that we have a lot of wildlife out there, I think that would be an asset to play on,” she said.
Trebatoski pointed out that the brochure for the business park does show that portions are a natural preserve, careful to avoid reference to any wetlands, which impedes development.
“I’m a nature-lover,” Chamber said. “It is a huge asset and it is something I enjoy. A developer sees that as a huge threat. They don’t want anything that is going to mess with what they can and can’t bulldoze over.”
However, he pointed out that people who are going to build in Fort Atkinson are more likely to live in the area.
“It is a lot different if you are on I-94 or I-43, you’re going to get developers that put spec (speculative industrial building) up because they know businesses need the space in these areas,” Chambers said.
As for his advertising, Chambers said he has cold-called virtually every industrial company within the Fort Atkinson area.
“It is what I do on a daily basis,” he said. “They don’t want to talk to me sometimes. Everybody has a message for me.”
Chambers said advertising behind the sign does not go on as much as him handing out brochures to potential prospects.
“I want to know what your businesses are doing here, too,” he said. “In all reality, Fort Atkinson has a lot of good businesses. That had something to do with the fact why when I?talked to Matt, you guys have good business here. I’m trying to fill up the park, but you have a good core solid industrial market here and it is something to be proud of.”
Further, Chambers assured that council that there really is nothing more the city could be doing.
“I don’t toot my own horn, but I?do a lot of extra work that I?know other individuals don’t do,” he said. “I’m doing everything I can. There is nothing more you guys can do.”
Chambers noted that the prospects looking for something in the business park already know its there, adding that the reason it is good to have a firm like CBRE is if a prospect comes from outside the area, he’s going to know about it, unless it is an oddball prospect such as Foxconn.
Council President Mason Becker also praised Chambers for his ongoing efforts.
“Obviously, you’re putting a lot of work into this,” he said. “I feel fairly confident, based on what you’re telling us, that something will happen.”